Macy’s revealed its plans to expand to China this week with the opening of a Tmall store. While Macy’s is the category’s pioneer on Tmall, L2’s Digital IQ Index: Department Stores shows that international expansion has been a priority of many iconic brands in the category. For example, Bloomingdale’s has built out extensive support for international shipping and currency conversion. Neiman Marcus acquired German multibrand luxury site MyTheresa in September 2014, widening its international footprint. Meanwhile, subsidiary Bergdorf Goodman partnered in February with Borderfree to offer international shipping. And Lane Crawford now offers free cross-border shipping on online orders.
Brand efforts to globalize do not end with shipping. Category leaders are investing in making their name known beyond their home borders. The average U.S.-based department store displays mobile ads in six countries, and mobile ads for the average U.K.-based brand appear in four.
Can there be a downside to rapid international expansion? Potentially. Neiman Marcus, for example, launched an online shop for China in 2013, but has since opted to reach Chinese consumers through Mandarin translation, size conversion charts, customized creative, and direct shipments from the U.S. Yet, e-commerce allows department stores to drive brand recognition and sales beyond their borders with little risk relative to brick-and-mortar retail.
For more on department stores’ efforts to expand their footprint around the globe, download a copy of L2’s Digital IQ Index: Department Stores.